Jeff Cram: Hi Laurie.  It’s great to be talking with you.

Laurie McCabe: Thanks.  Let’s start out with you telling me a little bit about what you define CMS as.  It seems to be kind of a blurry topic to a lot of people and it means different things to different people.  How does ISITE Design define CMS, first of all?

Jeff Cram: You’re right that it’s blurry.  Web content management has really become increasingly quite muddy over the last few years.  Its simplest definition is—we typically refer to it as—the platform and technology that manages and delivers your content on the web.

We’ve come to understand there are web content management systems that are technologies or hosted platforms that drive most of what you see and interact with on the web.  But, of course it’s not that simple because web content management is a lot more than technology; it’s a whole set of processes and people who go behind making these experiences come to life.

So, when you’re looking at it as a buyer or someone evaluating the marketplace, you have everything ranging from free inexpensive platforms that are open source that we’ve all probably seen like WordPress and Drupal, to very complex enterprise technology solutions that larger companies run.  Then you have the spectrum of everything in between.

Organizations, especially on the small to medium size, that are approaching this—when they poke their head up and start to do searches for it—it’s an overwhelming task to sort through all the information out there because the differences between how different types of organizations approach it and where folks are in terms of their exact needs are significant.

Laurie McCabe: What kind of guidance can you give to mid-market companies that are looking to implement or maybe upgrade their CMS system?

Jeff Cram: In our role as both a consultant and somebody that writes a lot about CMS on our blog at The CMS Myth, we get a lot of these calls from organizations that are in the very early stages of thinking about what’s next in terms of how do we approach content management in a better way.

What we typically see is that organizations have kind of outgrown whatever they currently have and there’s something happening in a business that has them re-approaching or rethinking web content management.  I think part of what we advise is to take a step back and understand that you’re not just looking for a technology solution.  I think that’s where most organizations are going wrong is they rush to frame this project and approach as if they need a new piece of technology.  Instead, frame it around the fact that you need to look at web publishing, content strategy, and content management as a discipline first to then figure out what your technology needs are going to be.

In some cases we find that the technology that folks currently have is completely adequate to achieve most of what they need to achieve.  They really have just failed to put in a lot of the processes and people behind making it work.  In other cases they’ve completely outgrown the existing technology and truly do need to find a new path forward.

So, it’s not a one size fits all equation, but I think because there are so many shiny objects out there and so many exciting things happening with technology, it’s truly been an exciting last few years in terms of the innovation that we’re seeing in the web content management space.  There’s that, I think, natural desire to go out and just do demos of a lot of platforms and then you’re quickly into this software-driven sales cycle that’s funneling you down a process that isn’t actually approaching the problem in the right way.

Laurie McCabe: What way would you recommend to approach the problem?  Let’s say you’re a mid-market company and you really do feel like you’ve outgrown what you’re using.  As you said, it may not be the software but it may be more the way you’re managing it and resourcing it.  So, where do you start to get a handle on that?

Jeff Cram: I think a great place to start is just having the discussion internally and figuring out what is the role of content in our business; what is the role of digital on our website in our business?  I think a lot of times, as simple as that question sounds, organizations fail to answer that or at least plan for it adequately.

What’s been exciting over the last few years is that there’s been this momentum around the discipline of content strategy.  When we talk about content strategy and you think about publishing, it’s completely decoupled from technology or even channels.  So, we’re not talking about websites, we’re not talking about mobile; we’re talking about how does the organization plan, manage, and govern content as a strategic asset.

Given how hot content marketing is and given how hot the role of content is in lead acquisition and nurturing and just doing business in general, it’s something that a lot of organizations are indeed taking a step back and saying, “How are we going to approach publishing?  What is the role of mobile in our customer experience?  How are we going to look at how all this content meets the needs of our prospects and customers across their entire journey,” and that reframes the approach to understand how you should approach the technology.  It’s just something that I think a lot of folks don’t do until a little bit later in the process, if at all, when you’ve already made some of the technology decisions that will box you in.

Laurie McCabe: Right.  So, given what you just discussed, it also sounds relevant to the blog series you guys publish about the myths of CMS, what do you see as some of the biggest myths maybe particularly that SMBs might have around content management systems?

Jeff Cram: That’s a good question.  On The CMS Myth, the whole origin of this blog—I started this five years ago—and when we started it, it wasn’t at all meant to be negative about web content management.  We’re incredibly bullish about the opportunity and role of web content management in businesses.  But, the overarching myth—what we’ve just been discussing—is that it’s not just the technology consideration and discipline, and there’s a huge expectation gap that happens.  I think it happens a lot in enterprise software but it happens a lot specifically in CMS with just the way that it’s positioned and sold.

All the expectations that come from thinking about this new CMS platform, when you actually put that into action and what comes out the other end in terms of when you implement it and when you put it to work, there’s a huge gap that exists.  And that gap, that expectation gap, is what we call the CMS myth.

So, a few things come out of this when we start to look at what exactly are the myths.  One is that overwhelmingly people are under invested and organizations are under invested in the people that they put behind the platforms.  This is increasingly something that we’re seeing as a challenge.  We’re talking with a smaller organization over the last few weeks and they were looking for a new CMS and they didn’t even have one single person internally that they had allocated to managing and thinking about content.  If you don’t have at least that in place, any CMS you pick is going to be unsuccessful.  So, a lot of what we do is making sure organization have the right commitment to the people that they need to have in place to be managing content.

Laurie McCabe: Right.  So, it sounds like a lot of firms and smaller companies are just under-resourced and understaffed and maybe they don’t put enough value on doing content management well and how big an impact maybe it has on their business.  Would that be fair to say?

Jeff Cram: Absolutely, and it’s understandable especially for the small to medium-sized business that doesn’t have all the roles required to manage a web or digital team in today’s day and age, and certainly content is one of those that they probably have somebody that’s thinking about content but it’s not someone’s sole job, it’s what they do after they get the rest of their job done.

I think what’s happened is that the world we’re living in now, from a digital and marketing perspective, requires new roles and new skills that didn’t exist two or three years ago and sometimes six months ago.  I think it does require more of a people investment than they made in the past.  So there’s a need to make a bigger business case for the investment in people than they have in the past.  I think it’s an opportunity to do that at the same time that you’re making the case for technology.  I think that’s the missed opportunity a lot of times is that they’ll rush through a technology decision-making process without framing it with the overall picture in mind.  They kind of miss an opportunity to sell the business on the change that’s needed or the support in investment that’s needed to make this change that the business knows it needs to make.

Most people know that content is important now.  Everybody is talking about content marketing.  You have folks like Hubspot that have really created this whole category of inbound marketing and have put platforms out there for people to use and I think it has reached the highest levels of the organization where executives are looking at this and saying, “We need to be successful in this,” and they want to know how they do it.

I think it’s an opportunity for anybody to say, “This is an opportunity to get it right.  Here’s how organizations are approaching it, and here’s how we need to be approaching it over the next three to five years.”

Laurie McCabe: Right, and that segues into ISITE_Designwhat kind of best practice guidance can you give SMBs and mid-market companies as they think about reevaluating what they’re doing in the CMS space.

Jeff Cram: There are a few things happening that are really interesting.  One is that it’s hard to even define what CMS is anymore because there’s been this whole convergence of platforms and tools.  It’s no longer just about content management and content delivery.  When you think about the role of a content management system, it’s not only responsible for content management but it is also responsible for the delivery of all this content.  As marketers more own CMS as a strategic discipline inside organizations, what that means is this is personalization, this is analytics, and this is testing.

So, I think one of the things to recognize is you’re not likely looking at one single platform.  In fact, while there are platforms that do a lot of the assumptions, and CMS is adding more bells and whistles to be able to cater to them even for the small to medium size business, they probably have at least four to five—if not more—separate platforms that are all part of this marketing technology ecosystem.

Laurie McCabe: Could you give me an example of what those might be in a typical business?

Jeff Cram: Sure.  In addition to content management, often times you’re going to have some kind of an analytics platform in place which, while it isn’t directly tied to management content, it is increasingly tied to understanding how content is delivered.  A big trend too is tools to help with testing and personalization.  So, there’s a whole range of standalone tools out there.  Google has some free ones.

Laurie McCabe: You mean like A/B landing page tests and all that?

Jeff Cram: That’s right.  There’s another really kind of inexpensive one that we use for our clients called Optimizely, which allows organizations to A/B test anything.  This isn’t a content management system but it layers on top of a content management system.

For the B-to-B organizations, they’re looking at marketing automation systems so you’re probably familiar with like Marketto or Eloqua.

Laurie McCabe: Yes, and companies like Infusionsoft in the small business space.

Jeff Cram: But these are really interesting because they are also part of the content management picture. They are managing landing pages, they’re managing forums, and they’re managing the email that comes off.  So you see two things happening.  One is larger content management vendors saying, “We can be all things to all people and we’re actually going to start to build a suite of tools that is integrated and can start to add these different capabilities into one.”  And they suddenly don’t like to be called web content management platforms because they’re now customer engagement platforms or marketing suites, right?

So you see a lot of consolidation and a lot of feature expansion in the traditional WCM vendors, but you also see just this explosion of new tools and new companies that are best of breed solutions in these very specific areas.

I met with a company that was a larger enterprise.  We met with one last week and when we added out all the different pieces of their marketing technology they had a couple dozen different individual tools and platforms that were managing part of their customer experience.  So, I think for the small to medium size business it’s really important to look at the overall marketing technology ecosystem, understand what the role of content management is and where the organization needs to differentiate and have an impact.

Laurie McCabe: It comes back to that soul-searching every time, right?

Jeff Cram: Yeah, and I think just having a plan for knowing.  One of the mistakes we see organizations make is if they’re evaluating a CMS and it has a specific feature, they check that box saying, “Hey, got it, it has marketing automation,” but they haven’t taken the time to say, “This is what marketing automation means for us and this is what we need to accomplish,” and then it turns out they may have been better suited with a standalone marketing automation platform.

Thinking of it as an ecosystem, there’s a great resource out there.  There’s a blogger by the name of Scott Brinker who runs a site called The Chief Marketing Technologist and he’s a fantastic resource for helping to explain what this marketing ecosystem is all about and kind of how organizations need to think about it in a different way.

Laurie McCabe: Great.  Well, I think you really covered a lot of ground and it’s been really educational for me, and I’m sure a lot of the folks that will tune in or read the blog will also get a lot of benefit from it.  Before we go, can you just provide your web address, which we’ll also post up on the podcast and on the blog, but just incase anyone is listening to it.

Jeff Cram: Sure.  Our agency is ISITE Design and that’s www.ISITEDesign.com.  We’re in Boston, Massachusetts and Portland, Oregon.  The CMS Myth blog that I mentioned is just at The CMS Myth which is just www.CMSMyth.com.

Laurie McCabe: Jeff, thank you so much.  We appreciate your insights and look forward to talking to you again soon.

Jeff Cram: Great, thank you Laurie.

Instead of talking heads, the day was interactive from start to finish, with speakers who realized that they have as much to learn from attendees as the other way around. And instead of PowerPoint slides, dpict.info’s scribe captured the story as it unfolded, building this great infographic to sum up the day’s key conversations and insights.

Dell’s Entrepreneur in Residence, Ingrid Vanderveldt (who I spoke to in this video interview) kicked off the event some interesting stats about how Boston small businesses view the current business environment and their ability access to capital, talent and technology. Whitney Johnson (@johnsonwhitney), Author of Dare, Dream, Do and Harvard Business Review Blogger and event moderator, introduced the 4 different themes for the day, each facilitated by a local small business expert:

• Creating a Social Strategy: Chris Brogan (@chrisbrogan)
• Access to capital: Amy Millman (@amillman)
• Access to networks, talent and expertise: Abbie Lundberg (@abbielundberg)
• Access to technology Sharon Kan

From my perspective, some of the most interesting takeaways from the day were that small business owners:

• Struggle to find qualified people who are also a good fit for the company’s culture. Although small business owners believe that talent and expertise are the most important contributors to business growth, they find it difficult task to access the talent they need. The investment required to recruit, hire and train someone looms large for small business, and the risk of hiring someone who doesn’t work out is a big one. While people have had success outsourcing smaller jobs to contractors via sites such as Elance, TaskRabbit and Zirtual, “you reach a point where you need talent that you can trust, commit to and hire.” Practical advice included to “go where the talent is,” for example, check out http://www.meetup.com/ and go to meetups where you’re most likely to find the types of people you’re looking for, and learn some of the lingo they use so you can engage in a meaningful conversation. Other suggestions included writing down and codifying your corporate values so that you can clearly articulate them to the candidates you interview. Finally, look for people with complementary skills to yours, and those who can do the job as well or even better than you can.

• See technology as both a blessing and a curse. One the one hand, the Internet and mobile solutions have made it much easier for people to collaborate and connect. On the other hand, small business owners are in information overload when it comes to sorting through all the thousands of available technology solutions and determine which can really help them achieve their business goals–growing revenue, being more productive, and operating more profitably. Dell’s survey indicates that 41% of Boston small businesses see technology needs as becoming increasingly complex, yet only 1 in 10 have full-time dedicated IT people. This mirrors SMB Group’s North America research findings. Most small businesses see the value of technology in making their businesses successful, but need a lot of help to identify which solutions will have the biggest impact on business results.

• Believe telecommuting and working remotely enables productivity. Sorry, @Yahoo Melissa Mayer, but I think its fair to say that you are swimming against the tide. The general sentiment seemed to be that although live, face-to-face meetings are ideal for some things, the ability to work remotely has given small businesses more flexibility and access to talent. For instance, Sharon Kan, an entrepreneur with four successful start-up exits, kicked of the Access to Technology session by saying she runs her businesses with “a phone and a laptop.”

• Typically pull their businesses up with their own bootstraps. Only 3% of Boston small businesses relied on venture capital and angel investors to get off the ground. Personal savings are the top source of funding at 44%, followed by banks and credit unions at 23%. Amy Millman of Springboard Investors, which has funded a raft of innovative start-ups, including Zipcar, iRobot and Constant Contact, gave business owners insights into what investors are looking for. First, you must be able to clearly articulate how your company is going to make money, and “learn the language of funders and investors”. More pointedly, when a prospect says “wow”, take it a step further. Find out the “why and how of the wow” and use that in your pitch to investors.

• Need to get more strategic about using social media. According to Chris Brogan, who led the social media breakout, all businesses must think like “fledgling TV stations and create their own media” and “build trust at a distance.” The challenge is how to do this effectively. SMB Group’s 2012 Social Business survey indicates that of the 53% of small businesses using social media, less than half use it in a strategic way. According to Chris, small businesses need a home base, such as a web site or blog, and two “outposts.” One outpost should be the social media site that’s the best fit for your story and how you want to tell it (I would add that it also needs to be a place where your prospects hang out) and the other is email marketing: bad email marketing may be dead but good email marketing isn’t. Don’t try to spread yourself too thin–concentrate on using these three to help you “articulate, reach, trust, engage and echo” to meet your business goals.

Overall, the interactive format, access to experts and eclectic mix of small business owners added up to an event that gave attendees information and inspiration, and new connections with people to get help from and vice versa.

Dell put a lot into the event. In addition to Ingrid and a number of Dell marketing and AR staff, Dell product strategy, management and technology teams were also well represented. With its listening ears on at events such as this, Dell is taking the right steps not only to help small businesses succeed, but to also ensure that it has the insights it needs to provide small businesses with the solutions they need to move ahead.

The Boston event was the last stop on Dell’s inaugural Think Tank tour of nine cities, but I’m told that Dell intends to follow-up with a new tour schedule soon.

In addition, Sage is unloading four solutions sold in Europe. Combined, these sales amount to about $145 million, and result in a loss to Sage. Accel-KKR and Sage provided Swiftpage with significant capital to help finance Swiftpage’s SalesLogix and ACT! purchases. Sage will retain 16.1% ownership in this deal.

The sale affects about 1,000 of Sage’s 13,000 employees, with about 250 people from Sage ACT! and SalesLogix moving to Swiftpage. In my conversation with Himanshu Palsule, Sage’s North American support group is working with Swiftpage to put an escalation process in place for customers.

Sage isn’t exiting the CRM market, however. It is retaining Sage CRM (which it acquired as part of its purchase of ACCPAC several years ago) as its core CRM product.

Following Through On a Strategy to Streamline

Sage’s announcement doesn’t come as a big surprise. At Sage Summit 2012 last August, Sage North America management revealed its strategy to concentrate development on what Sage termed core solutions areas–namely financials, ERP, and payroll, as discussed in my post, Sage Turns a New Leaf: Top Takeaways from Sage Summit 2012.

At the event, Sage North America CEO Pascal Houillon set forth Sage’s strategy to move from a heavily decentralized product management and marketing approach to one that is more centralized and focused—and to put the company on a stronger growth trajectory. By streamlining its offerings, Sage intends to provide customers and partners with a more integrated experience and more flexibility to take advantage of new cloud-based connected services.

Shedding CRM Solutions That Weren’t Keeping Pace with Market Trends

Over the years, Sage has been very acquisitive. But many of its acquisitions haven’t really paid off. This has been particularly true for Sage ACT! and SalesLogix, both of which Sage acquired in 2001 when it bought Interact Commerce. Sage bought these products when desktop and client-server computing were at their peak–but about to wane. Since then, of course, the likes of Salesforce.com, Zoho CRM, Nimble and many other CRM cloud offerings have come to the forefront. Meanwhile, Sage has struggled to make the cloud transition with its CRM products. In addition, Sage hasn’t been able to keep pace with developing the new social capabilities that customers want in CRM solutions. These limitations have made it difficult to sell these products to new customers.

While Sage did develop integrations for ACT! and SalesLogix with its financials solutions, its attempts to cross-sell CRM to its installed base of financials and ERP customers met with limited success. The partner channel and end-user decision-makers for CRM and financials solutions are very different, and Sage was unable to develop an effective method to bridge the gap. As a result, there is very little customer overlap between the two.

With ACT! and SalesLogix off the plate, Sage intends to increase its focus on its core financials and ERP products, including Sage 50 (formerly Peachtree), Sage 1oo ERP (formerly Sage ERP MAS 90 & 200), Sage 300 ERP (formerly ACCPAC), and Sage ERP X3, and provide a richer set of connected services for these solutions.

Moving Forward

For a very long time, Sage has looked to acquisitions as a way to fuel growth, acquiring scores of business software products over the years. Sage has had a hard time rationalizing its strategy, sparking much criticism for having a cluttered portfolio, too many products and not enough focus.

Now, Sage is taking a 180-degree turn to sell off surplus solutions, freeing up development and marketing resources to create cleaner, more integrated solutions and messaging. While it’s too early to tell if this new strategy will result in the growth Sage is looking for, the move does give the company more bandwidth to concentrate on its core financial solutions, and give its remaining Sage CRM product the types of cloud, social  and mobile capabilities that it needs to be competitive. In addition, Sage no longer has to contend with the politics of competing product lines and partner channels.

While the move may be a bit emotionally jarring for current ACT!  and SalesLogix customers, they shouldn’t experience too much change in the short term. Over time, they may in fact see an upside, if Swiftpage, which has a strong focus in the digital marketing space,  can infuse the former Sage solutions with the updated cloud, social and mobile capabilities that they will need to attract new customers.

As usual at these events, IBM showcased a panoply of new, updated and acquired solutions under the theme “From Liking to Leading”. I’d paraphrase IBM’s social business strategy as helping companies integrate new social tools with business workflows to operate more effectively–whether to increase employee productivity, improve customer service, streamline the supply chain or to market and sell goods and services. For example, IBM illustrated its approach to integrate social with key business processes through demos of its recently acquired Kenexa HR and talent management portfolio, and via its Smarter Commerce “buy, market, sell and service” platform.

While IBM’s broad definition of social business makes sense, it is also somewhat squishy depending on who, when, what, where and how the story is told. Furthermore, there are literally dozens of moving parts in the story, from the Lotus portfolio to IBM SmartCloud for Social Business to the new Smarter Workforce Kenexa strategy–not to mention integration with other IBM and partner solutions, and the services needed to use them effectively. This begs the question of whether IBM can effectively communicate its social business vision to SMBs–and maybe whether it should even try.

Making the Connection with SMBs

Currently, many SMBs equate social business to using public social media sites such as Twitter, Facebook and LinkedIn to promote and market their businesses. In fact, SMB Group’s 2012 SMB Social Business Study revealed that SMBs’ use of social in their businesses remains concentrated in marketing areas (Figure 1).

Figure 1: Medium Business: Current Use of Social Tools For Business Functions

But interest in using social in other business areas is growing, especially among medium businesses with 100-999 employees–a prime target market for IBM. Medium businesses are increasingly using and finding value in social beyond the marketing realm.

Meanwhile, as shown in Figure 2, just 13% of medium businesses view integrating social tools with traditional business applications as a very important, top priority.

Figure 2: Medium Business: Importance of Integrating Traditional Business Applications with Social Media Tools

While 44% think its important, they either don’t have the time/resources for it, or will do it opportunistically. These companies in particular will require that vendors come to the table with clear messaging, accessible solutions, and the ability to demonstrate a rapid return on investment.

Given these realities, how likely is it that SMBs will connect with IBM’s social business story? Even though I was only one of a handful of SMB technology analysts at IBM Connect, I wasn’t the only one in the Analyst Q&A sessions asking how IBM will make its social business solutions more digestible not only for mid-market businesses, but for IBM business partners (most of whom are SMBs themselves). The dialogue exposed a healthy degree of skepticism about IBM’s ability to clarify its social business message and simplify how midmarket businesses access and use its solutions–and left it unclear as to how it will help its partners capitalize on this opportunity.

Should IBM Even Go There?

With IBM’s impressive and solid stronghold in the large enterprise space, why should it divert any of its attention and resources to the midmarket? After all, the midmarket requires an entirely different solutions, services and sales approach than in the large enterprise space. In fact, as I was tweeting key points and thoughts during one the Q&As, I had the following exchange:

@sliewehr: analyst q&a at #IBMConnect-?s re if IBM will sell to #SMBs. affirmation they will. #Idontgetit 


@sliewehr: I’m not sure you need to orient products to SMBs in order to educate them if you’re IBM. Still odd to me.

@lauriemccabe: do you mean its odd that IBM wants to sell to SMB or something else? Not clear what you meant

@sliewehr: Yes…confused why IBM feels they should focus on SMB at all. It’s a tail-chasing game that they’ll lose to smaller innovators

@StuartMcIntyre: IBM doesn’t tend to do SMB well, but it’s a huge market that they’d be crazy to ignore. IBM+partners can reach it

@lauriemccabe Reasons IBM needs SMBs: 1-fuel its own growth 2-some SMBs grow up to become LEs 3-SMBs fueling growth/innovation

Why IBM Can’t Ignore SMBs in the Social Era

Admittedly, as an SMB analyst, I’m biased. But I see several reasons why IBM can’t ignore the need to develop a compelling social business story for SMBs, including:

1. The size of the SMB market is too big to ignore. IBM needs to expand its market share here to fuel its own corporate growth.
2. Fortune 500 turnover. Small companies become large businesses and large ones go out of business. 238 of the companies that made the 1999 Fortune 500 list had slipped off the 2009 Fortune 500 rankings. New technology solutions will only intensify this turnover, and agile innovative fast growth companies will start small but become the Amazons and Googles of the future.
3. SMBs are leading the democratization trend in technology solutions. Because scarcity of IT and business process expertise is the norm in SMBs, hey need solutions that they can deploy, use and become productive with quickly and easily. IBM needs firsthand insights into how SMBs use technology to most effectively capitalize on these trends and develop solutions that can scale up or down.
4. Adoption of collaboration and social solutions is often viral. Collaboration is the only activity that every employee, in every company, engages in every day. User adoption of solutions in this space is as likely to be bottom up as top down, as evidenced by vendors as diverse as Dropbox and Twitter. In this market, solutions need to be appealing and accessible or users will bring their own to work.

Perspective

Will IBM be able to take its SMB game to the next level in social business in the SMB market? Some IBM social business offerings, such as Smart Cloud for Social Business, have the potential to tap into this opportunity, but IBM seems to move slowly and has little visibility compared to competitors, such as Google Apps for Business and Microsoft 365.

Overall, IBM is making a strong channel investment to enable its business partners, and especially Managed Service Providers (MSPs) to provide midmarket customers with its solutions. But unlike some other technology areas, social business is as much (if not more) of a cultural shift as a technology shift. Midmarket organizations don’t have as much bandwidth–or patience–to absorb complex messaging and solutions as large enterprises. And, let’s not forget, most of the channel partners that serve SMBs are themselves SMBs.

While IBM will almost certainly wear the social business crown in large enterprises, its ability to make significant inroads in the SMB market is questionable. Given the diverse, highly fragmented nature of both the SMB market and the partners that serve it, IBM needs to do a lot more work to make its solutions easier to understand, access, use and sell to make real headway.

As usual at these events, IBM showcased a panoply of new, updated and acquired solutions under the theme “From Liking to Leading”. I’d paraphrase IBM’s social business strategy as helping companies integrate new social tools with business workflows to operate more effectively–whether to increase employee productivity, improve customer service, streamline the supply chain or to market and sell goods and services. For example, IBM illustrated its approach to integrate social with key business processes through demos of its recently acquired Kenexa HR and talent management portfolio, and via its Smarter Commerce “buy, market, sell and service” platform.

While IBM’s broad definition of social business makes sense, it is also somewhat squishy depending on who, when, what, where and how the story is told. Furthermore, there are literally dozens of moving parts in the story, from the Lotus portfolio to IBM SmartCloud for Social Business to the new Smarter Workforce Kenexa strategy–not to mention integration with other IBM and partner solutions, and the services needed to use them effectively. This begs the question of whether IBM can effectively communicate its social business vision to SMBs–and maybe whether it should even try.

Making the Connection with SMBs

Currently, many SMBs equate social business to using public social media sites such as Twitter, Facebook and LinkedIn to promote and market their businesses. In fact, SMB Group’s 2012 SMB Social Business Study revealed that SMBs’ use of social in their businesses remains concentrated in marketing areas (Figure 1).

Figure 1: Medium Business: Current Use of Social Tools For Business Functions

But interest in using social in other business areas is growing, especially among medium businesses with 100-999 employees–a prime target market for IBM. Medium businesses are increasingly using and finding value in social beyond the marketing realm.

Meanwhile, as shown in Figure 2, just 13% of medium businesses view integrating social tools with traditional business applications as a very important, top priority.

Figure 2: Medium Business: Importance of Integrating Traditional Business Applications with Social Media Tools

While 44% think its important, they either don’t have the time/resources for it, or will do it opportunistically. These companies in particular will require that vendors come to the table with clear messaging, accessible solutions, and the ability to demonstrate a rapid return on investment.

Given these realities, how likely is it that SMBs will connect with IBM’s social business story? Even though I was only one of a handful of SMB technology analysts at IBM Connect, I wasn’t the only one in the Analyst Q&A sessions asking how IBM will make its social business solutions more digestible not only for mid-market businesses, but for IBM business partners (most of whom are SMBs themselves). The dialogue exposed a healthy degree of skepticism about IBM’s ability to clarify its social business message and simplify how midmarket businesses access and use its solutions–and left it unclear as to how it will help its partners capitalize on this opportunity.

Should IBM Even Go There?

With IBM’s impressive and solid stronghold in the large enterprise space, why should it divert any of its attention and resources to the midmarket? After all, the midmarket requires an entirely different solutions, services and sales approach than in the large enterprise space. In fact, as I was tweeting key points and thoughts during one the Q&As, I had the following exchange:

@sliewehr: analyst q&a at #IBMConnect-?s re if IBM will sell to #SMBs. affirmation they will. #Idontgetit 


@sliewehr: I’m not sure you need to orient products to SMBs in order to educate them if you’re IBM. Still odd to me.

@lauriemccabe: do you mean its odd that IBM wants to sell to SMB or something else? Not clear what you meant

@sliewehr: Yes…confused why IBM feels they should focus on SMB at all. It’s a tail-chasing game that they’ll lose to smaller innovators

@StuartMcIntyre: IBM doesn’t tend to do SMB well, but it’s a huge market that they’d be crazy to ignore. IBM+partners can reach it

@lauriemccabe Reasons IBM needs SMBs: 1-fuel its own growth 2-some SMBs grow up to become LEs 3-SMBs fueling growth/innovation

Why IBM Can’t Ignore SMBs in the Social Era

Admittedly, as an SMB analyst, I’m biased. But I see several reasons why IBM can’t ignore the need to develop a compelling social business story for SMBs, including:

1. The size of the SMB market is too big to ignore. IBM needs to expand its market share here to fuel its own corporate growth.
2. Fortune 500 turnover. Small companies become large businesses and large ones go out of business. 238 of the companies that made the 1999 Fortune 500 list had slipped off the 2009 Fortune 500 rankings. New technology solutions will only intensify this turnover, and agile innovative fast growth companies will start small but become the Amazons and Googles of the future.
3. SMBs are leading the democratization trend in technology solutions. Because scarcity of IT and business process expertise is the norm in SMBs, hey need solutions that they can deploy, use and become productive with quickly and easily. IBM needs firsthand insights into how SMBs use technology to most effectively capitalize on these trends and develop solutions that can scale up or down.
4. Adoption of collaboration and social solutions is often viral. Collaboration is the only activity that every employee, in every company, engages in every day. User adoption of solutions in this space is as likely to be bottom up as top down, as evidenced by vendors as diverse as Dropbox and Twitter. In this market, solutions need to be appealing and accessible or users will bring their own to work.

Perspective

Will IBM be able to take its SMB game to the next level in social business in the SMB market? Some IBM social business offerings, such as Smart Cloud for Social Business, have the potential to tap into this opportunity, but IBM seems to move slowly and has little visibility compared to competitors, such as Google Apps for Business and Microsoft 365.

Overall, IBM is making a strong channel investment to enable its business partners, and especially Managed Service Providers (MSPs) to provide midmarket customers with its solutions. But unlike some other technology areas, social business is as much (if not more) of a cultural shift as a technology shift. Midmarket organizations don’t have as much bandwidth–or patience–to absorb complex messaging and solutions as large enterprises. And, let’s not forget, most of the channel partners that serve SMBs are themselves SMBs.

While IBM will almost certainly wear the social business crown in large enterprises, its ability to make significant inroads in the SMB market is questionable. Given the diverse, highly fragmented nature of both the SMB market and the partners that serve it, IBM needs to do a lot more work to make its solutions easier to understand, access, use and sell to make real headway.

But at SAP’s first small and medium-sized enterprise (SME) summit, hosted at the company’s New York offices in late November, co-CEO Bill McDermott and other key SAP execs made it clear that SAP is intensifying its aspirations and endeavors with new programs and initiatives that reach well beyond its conventional solutions.

From SME Solutions to an SME Ecosystem

Over the last few years, SAP has steadily grown its SME business with its traditional solution offerings. For instance, year-over-year revenues have grown 20% for SAP Business One, SAP’s flagship ERP offering for small businesses. As discussed in The Progressive SMB: Customer Stories are Worth 1,000 Analyst Words, SAP has been particularly attractive to Progressive SMBs, who realize the increasingly direct connection between strategic IT investments and successful business outcomes.

The steady growth of SAP solutions has been admirable, but, as we learned at the SME Summit, SAP is casting a much wider net through a series of different initiatives that bring SAP’s big data, mobile and cloud capabilities to smaller organizations in a more accessible manner. Together, these are starting to take the shape of a growing SAP SME ecosystem. For instance, SAP is:

• Growing and enabling the traditional partner channel. SAP channel partners currently account for one-third of SAP SME sales. SAP intends to raise this to 40% by 2015. To help accomplish this, SAP is enabling more of its traditional partners (VARs, SIs, MSPs, etc.) with Rapid Deployment Solutions (RDS).  Currently, SAP offers 150 RDS solutions, which provide businesses with fixed cost, fixed scope preconfigured software, best practices and implementation services that give customers everything they need to get up and running in just a few weeks. RDS has proven to be very instrumental in driving SAP’s growth in the SME sector. In the past year, RDS deployments in SME have outpaced the 500%+ overall RDS growth rate over the prior year. The importance of building and enabling the channel cannot be underestimated: according to SMB Group’s 2012 SMB Routes to Market Study, over half of SMBs purchase business applications through indirect channels.

• Recruiting partners to build micro-vertical solutions on Business One. The small business market is actually very fragmented. While all small businesses share some common needs, each micro-vertical has unique requirements and needs specific capabilities when it comes to business software. SAP is building a development-focused partner channel to zero in on the needs of each micro-vertical. For instance, SAP partner Orchestra is building specialized solutions on Business One for small businesses in the fuel, beer and food industries. OrchestraBeer was showcased at the Summit. In this video interview, Ryan Hilliard, CEO of Hilliard’s Beer, a small startup with less than 10 employees, explains to me why he selected OrchestraBeer. Ryan plans to grow his business, and wanted a solution that would grow with him, and one over the lifetime of his business. But he also needed a turnkey solution geared to his business, and able to track specific metrics–such as batches and barrels of beer for visibility into his supply chain and production.

• Empowering startups with SAP HANA. At the Summit, SAP announced that it has powered over 150 startups in Silicon Valley with SAP HANA. These startups are using HANA as a development platform to provide SMBs with a new, user-friendly generation of real-time analytics and advanced predictive solutions. For instance, Vish Canaran, CEO of Liquid Analytics, talked about his company’s cloud-based, mobile analytics applications for iPhone, iPad, Blackberry and Android users.  As Vish explained to me in this video discussion, Liquid Analytics starts with the user experience to help optimize productivity. Liquid Analytics apps use gamification and predictive analytics to help make it easier, quicker and more fun for wholesale industry sales reps to place orders and set and meet sales goals. As noted in SMB Group’s 2012 SMB Routes to Market Study, the data fire hose is running at full blast and shows little signs of abating. But, the big gap in big data is painfully evident for small businesses: Just 18% have purchased/upgraded a business intelligence solution in the past 24 months, and only 17% plan to do so in the next 12 months. Solutions such as Liquid Analytics show promise to offer small businesses an accessible, user-friendly ways to harness big data for business good.

• Extending the Ariba network effect. As part of SAP’s recent Ariba acquisition, every SAP customer gets a free connection into the Ariba network (and any company, whether an SAP customer or not, can enroll as a Supplier on the Ariba Network). As revealed in our 2012 SMB Routes to Market Study, about one-quarter of SMBs sell goods and services to large enterprises. Since attracting new customers, growing revenues, and increasing profitability are perennial SMB challenges, we expect that SMB interest and involvement in big company supplier networks to heat up in 2013. As discussed in SMB Group’s Top 10 SMB Technology Predictions for 2013, access to the Ariba network is one opportunity that SMBs can leverage to compete for their share of the $300 billion dollars that large businesses spend annually on goods and services.

Looking Beyond Technology

SAP is also expanding its engagements with influencers, venture capitalists, governmental agencies and other vital SME catalysts. The Summit’s “Power of Small” panel featured speakers with wide-ranging perspectives and influence in the SME market, and underscored that SAP’s focus will go well beyond technology to include initiatives focused on policy, people, capital to help create an environment in which SMEs can thrive.

For example, Linda Rottenberg of Endeavor, who pioneered the examination of how high-growth business can transform economies, discussed the necessity of “mentor capital” for SME success. At the event, Bill McDermott announced that SAP has committed to help Endeavor select, mentor, and accelerate high-impact entrepreneurs on a global scale. Sunil Hirani of trueEX examined the effect of immigration policies on entrepreneurship in the U.S., and the importance of aligning governmental policies to help SMEs prosper.

Perspective

With these initiatives, SAP is tapping into a very important trend. As discussed in SMB Group’s Top 10 SMB Technology Predictions for 2013, Progressive SMBs, who invest more in technology and use technology for competitive advantage are also much more likely to anticipate revenue gains than peers whose tech investments are flat or declining. We also see this gap widening year over year, and expect that it will continue to do so.

Although not everyone at SAP may yet “get” small business, it was clear from the event that Co-CEO Bill McDermott does understand them, and also values the increasingly make or break role that technology plays for SMEs. SAP’s commitment to enabling partners to expose it technology in a relevant way, and its investment in the broader SME community were on display at this high-profile event, making it clear that McDermott wants to make SAP a household name among SMEs.  A lofty goal, to be sure, but one that SAP is very committed to aspiring to.

To put things in context, Dell has been on a journey for a couple of years to transform from a hardware company provide businesses with open, flexible and easier to use IT solutions that can scale up or down as needed. Dell is leveraging cloud computing, open standards, and a blend of hardware, service and software offerings to build more comprehensive solutions. And, Dell has pegged midmarket business requirements as its design focal point to ensure scalability for organizations of all sizes. As I discussed in The New Dell and What it Means for SMBs: Takeaways from Dell’s 2011 Solutions for a Virtual Era Event, Dell has also made many acquisitions to turn this vision into reality, including KACE, Boomi, Wyse, SonicWall, Quest and AppAssure and others.

On Track for Transformation

Dell has taken a lot of heat for not turning around fast enough to please some analyst and pundits. But, at the event, Dell provided a status report on its progress, and unveiled several new strategies, products and services that I believe will continue to propel it forward.

For example, Dell reported that cloud revenue has increased 30% year for Q3 FY 2013, and that its x86 server shipment growth outpaced the industry overall (and HP and IBM in particular) according to International Data Corporation’s (IDC) Q3 2012 Worldwide Quarterly Server Tracker. In addition, security revenue for Q3 FY 2013 rose 16% year over year. Dell now processes more than 30 billion events every day, and is growing its footprint in the security area. Perhaps most importantly, services and consulting now account for roughly one-third of Dell’s sales.

Among the many announcements that are part and parcel of any vendor user conference, several highlighted how Dell is turning its vision into reality, including that Dell has:

• Chosen OpenStack as its open source cloud platform of choice for public and private cloud. This extends Dell’s commitment to open, standards-based solutions. While it will still provide customers with solutions on other cloud platforms, the vendor has endorsed OpenStack as the most open, flexible way to implement a hybrid environment and move workloads between private and public clouds.

• Added new solutions to its Active Infrastructure converged infrastructure portfolio. Dell announced new blueprints for VDI and unified communications and collaboration applications and workloads. This builds on Dell’s goal of helping customers to streamline IT deployment and management with Active Infrastructure solutions. These combine servers, storage, networking and infrastructure systems management into integrated solutions that zero in on specific workload requirements to speed deployment, cut costs and energy consumption, and simplify operations.

• Unveiled the CIO Powerboard. Using Boomi, Dell has knit together management tools from Quest, KACE, SonicWALL and AppAssure to provide IT with a unified view and metrics across their IT environment–another proof point of Dell’s ability to provide more integrated, end-to-end solutions.

We also got a glimpse into the strong potential that Dell’s Wyse acquisition has to propel Dell into the mobile management space from the very energetic Tarkan Maner, Dell Wyse President and CEO. Maner demoed the Pocket Cloud web service, which allows users to search all of their physical, virtual systems and clouds. As I discussed here, Dell recently launched Dell Wyse Cloud Client Manager (CCM), which incorporates Pocket Cloud technology, and provides businesses a centralized mobile management platform with an SMB-friendly price tag.

Stepping Up Support for SMBs

Beyond new solutions and technology directions, Dell took the wraps off of two new initiatives designed to help entrepreneurs start and grow their businesses.

For starters, Dell launched the Dell Center for Entrepreneurs, headed up by its Entrepreneur in Residence, Ingrid Vanderveldt. In this video interview,  Ingrid discusses how the community is built by and designed for entrepreneurs. One of the program’s key goals  is to help entrepreneurs secure capital to invest in the technology they need to grow. Dell Financial Services and the Dell Innovators Credit Fund supply credit and leasing options, and the site also offers webcasts, videos and case studies from Dell, industry experts, and a community of entrepreneurs sharing their experiences.

With former President Bill Clinton on hand as the event’s marquee keynote speaker, Dell also announced that it is sponsoring this year’s Clinton Global Initiative University and support the entrepreneurship theme at CGI U 2013, which will be held at Washington University in St. Louis in the spring. The track is designed to help students and young entrepreneurs get the grounding they need to launch, run and grow a business, and the increasingly vital role of technology in building a successful business.

Quick Take

Yes, Dell still has to figure out how (or maybe even whether) to really differentiate and innovate in the client and particularly the mobile device battle.

But Dell World served to highlight that Michael Dell has crafted a strong vision and is sticking to it, building it through a series of strong acquisitions (compare this to HP’s Palm and Autonomy debacles) and solid technology directions. Combined, Dell has assembled many of the building blocks it needs to achieve its vision. And, Dell will keep filling in missing puzzle pieces, as evidenced just a few days after Dell World, when Dell completed its acquisition of Credant Technologies to fortify its data protection capabilities.

Meanwhile, Dell’s continuing commitment to provide solutions that scale up and down from the midmarket bode well for growing its footprint in the SMB market. In addition, Dell’s new initiatives to support entrepreneurs are a natural, given Michael Dell’s credentials as a poster child for entrepreneurial success. Through these programs, Dell will not only help young companies benefit from technology, but forge engagements with entrepreneurs that will fuel future directions with fresh insights.

Overall, Dell World 2012 demonstrated while Dell still lacks a magic bullet for the client device side of its business, it is making steady progress in its goal to supply the end-to-end IT infrastructure solutions and services that businesses need to support them.

Brief Overview:

We discuss the various aspects and uses of Enterprise Performance Management (EPM), Business Intelligence (BI), and Social Analytical tools within the dynamics of a mid-market business.

We talk about how the proper use of EPM and BI tools and software by companies in the mid-market can achieve a higher level of corporate consistency and efficiency in performance management.

Our conversation turned to a new area of business intelligence – Social Analytics. Social Analytics tools monitor and analyze market and brand sentiment and the return on social engagement with consumers . They help mid-market companies monitor and engage with customers in the areas of support, sales and ongoing relationship development.

We offer some final advice on the “first steps” towards achieving an improved level of performance management within the mid-market corporation.

I hope you enjoy the podcast!

Podcast Segments and Timeline

00:00 – 01:10: Introductions and backgrounds

01:10 – 16:50: Enterprise Performance Management and Business Intelligence. Here’s what we covered:

• Defining Enterprise Performance Management (EPM) and Business Intelligence (BI) and the role it can play in helping mid-market(*) companies and where
• The rate of adoption of performance management practices and business intelligence in mid-market organizations
• Key issues facing mid-market leadership teams when it comes to enterprise wide performance management practices
• Some guidance for mid-market company leaders with respect to improving corporate performance and long term success
• What results are mid-market companies seeing from EPM and Business Intelligence solutions?

16:50 – 30:00: Social Analytics. What we covered:

• Defining Social Analytics and the role it can play in helping mid-market companies and where
• Whether mid-market companies are becoming interested in monitoring social networks and social media. If so, what they plan to do with this information and insight
• Whether the data from social networks is an opportunity for mid-market companies
• Final advice for CFO’s first steps to improve corporate performance management.

Thanks to Paul Clark and Chris Herbert (discussion moderator) for participating in this conversation. Below are their bios.

Paul Clark

Paul Clark is responsible for the messaging and deliverables that describe the business analytics solutions from SAP, from business intelligence and enterprise information management to enterprise performance management and governance, risk, and compliance. Paul has over 20 years’ experience in marketing, specializing in product and solution marketing. He holds a BSc from the University of Bristol, UK and a Management DESS from the Université de Savoie, France.

Chris Herbert

Chris Herbert is the manager of the CFO Intellectual Exchange Network which brings thought leaders together to share experiences and engage in conversations around the office of finance and the role technology is playing to improve business performance, compliance and overall success.

IGF is quadrupling its initial commitment to help SMBs finance new cloud, analytics, mobile and infrastructure technologies to help grow their businesses. The program also makes it easier for IBM business partners—including managed service providers (MSPs), who are often SMBs themselves–finance the infrastructure investment they need to build the hosting environments they need to serve customers.

Some of the details include:

• Deal minimums start at $5,000 U.S., and the maximum tops out at $500,000, with a 0% payment plan for 12 months, making the program relevant for both small and medium businesses.

• Typical financing contracts last 3 years, but no specific time frame is mandated.

• IBM business partners sell the financing. These business partners can size the solution and financing required to individual customer requirements, and execute the contract via IBM’s Rapid Online Financing widget, which is designed for non-financing experts.
• Credit-qualified SMBs can get an approval in just a few minutes.
• Financing options range from simple loans to tailored leases to total solutions including hardware, software and services (both IBM and non-IBM) in one contract with one predictable monthly payment.
• IBM is rolling out the program on a worldwide basis.

In addition, IBM has created a new mobile app to further streamline the process. Business partners can quickly provide their clients with price proposals and generate credit approvals using an iPad, iPhone or Android mobile device.

Access to Capital–the Fuel for Progressive SMBs

As discussed in The Technology—Performance Connection for Midmarket Businesses, technology has become a critical lynchpin for business success. Businesses of all sizes increasingly view technology as an essential to improving customer engagement, raising employee productivity, and creating innovation and differentiation—all necessary to building economic value.

SMB Group research reveals a distinct correlation between SMB investments in technology and their business performance. “Progressive SMBs,” who invest more in technology much more likely to anticipate revenue gains than peers whose tech investments are flat or declining. For instance, our recently completed 2012 SMB Routes to Market Study shows that while 85% of SMBs that plan to invest more in technology anticipate revenue increases in 2013, only 42% of those planning to decrease IT spending expect revenues to rise, and 38% that planning for flat IT investments are anticipating growth.

Figure 1: IT Spending Current and Planned

Source: 2012 and 2011 Small and Medium Business Routes to Market Study, SMB Group

Meanwhile, as more SMBs come to view technology as key enabler to create market advantage, level the playing field against bigger companies, and adapt to new business and market requirements, the percentage of SMBs that are planning to increase IT spending is growing, as shown in trending analysis of 2011 and 2012 SMB Routes to Market Studies (Figure 1).

However, access to capital remains tight, and many SMBs find it challenging to get the capital required for the technology investments they need to grow their businesses.A July 2012 survey by the National Small Business Association (NSBA) found that 43 percent that needed funds for their businesses over the past four years were unable to find a lender. As important, 53 percent said they’d been unable to grow their business or expand operations due to a lack of capital—and almost one-third had to lay off workers.

A Virtuous Cycle for IBM, SMBs and MSPs

IBM isn’t a charity or governmental agency. As a for-profit organization, one of IBM’s key goals for the program is to fuel sales of IBM products, including PureSystems, which offers a new, integrated platform to tune hardware and software resources for data intensive workloads, and gain more flexibility to configure applications for either an on-premise or hosted environments, and a multitude of infrastructure, cloud, mobile and business intelligence solutions. If past success is an indicator of future performance, IBM will certainly achieve this goal with its new round of financing.

Furthermore, this fresh pool of financing should helps MSPs to build scalable infrastructure and hosting environments, and provide more innovative and differentiated offerings to SMB customers. As I discussed in MSP Cloud Challenges in the Midmarket–and How IBM Helps Meet Them, top MSP challenges are to: procure and deploy the resources they need to scale and grow; stay ahead of the technology curve, and to provide the end-to-end services their customers want.  Since IBM financing will cover both IBM and non-IBM content in one contract, it will make it easier for MSPs to build out a more comprehensive, end-to-end infrastructure.

The result? IBM can attract new MSP and other partners, and get them outfitted with the solutions they need more quickly. The net-net is that MSPs and other IBM business partners will be able to speed up and scale their ability provide new solutions that SMBs need for business growth and agility, and help SMBs finance this investment.

Finally, IBM isn’t just throwing money (albeit a large amount) at the situation. The new round of financing is additive to several new global initiatives for MSPs, which IBM launched in September. IBM has put together an integrated program that provides the money, expertise and solutions that both MSPs and their Progressive SMB customers require.

This is the fifth and final post in a five-part blog series by SMB Group that examines the evolution of midmarket business technology solutions and IBM’s Managed Service Provider Channel programs.

Before developing our 2013 predictions, we wanted to assess how we did on our 2012 Top 10 SMB Technology Predictions. Here’s our take–please let us know what grades you would have given us!

And stay tuned for our Top 10 SMB Technology Predictions for 2013, which we will post in a couple of weeks!

Note: On this grading scale, 5 means that we came closest to hitting the mark, and 1 means we missed it entirely.

*In SMB Group Syndicated Survey studies, we define small businesses as those with 1-99 employees, and medium businesses as having 100-999 employees.

For more information on our most recent SMB Mobile, Social Business and Routes to Market Studies, please visit our website, www.smb-gr.com, or contact Sanjeev Aggarwal, Sanjeev.aggarwal@smb-gr.com, 508-410-3562.